Can innovation occur without cultural change?

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INSITUM is a leading innovation consultancy. We partner with organizations to solve business problems and develop innovation capabilities through design, strategy and social science.

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Can innovation occur without cultural change? Research on cultures of innovation reveals the need to re-design organizational bridges. By Ric Edinberg, Hannah Calderón and Claudia Ruge.

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ow many organizations do you know that are attempting to incorporate ‘creativity’ through newly hatched innovation departments? How many of these very same departments face cultural challenges as they work towards achieving their desired results? Many of INSITUM’s clients bring us on board as supportive partners in these efforts toward creativity. They are realizing that introducing buzz words, toolkits and even change agents are not enough. Transforming a culture is no small task. Embarking on this task requires an in-depth and honest understanding of the current state of an organization’s culture. As a result, an internal diagnosis is crucial. In our work across myriad industries, we’ve observed that organizations’ approaches to Research & Development often fall into four potential extremes that can get them stuck in a rut:

Research for research’s sake

Clashing cultures

Too much effort framing problems and perfecting details before launch ends up wasting a lot of money on research efforts that never make it past early definition and design.

Competing mindsets create friction and even when launch happens successfully, the internal culture becomes too focused on where credit and fault is due.

Perpetual pilot

Putting out fires

Moving quickly from a business case to a full blown pilot creates strong personal attachments to projects and a bias towards forcing small fix after small fix rather than considering the need to pivot or move in another direction.

Collecting ideas from many sources and quickly converting them into small-scale solutions for testing without framing or analysis of the problem at hand becomes overwhelming, circular and reactive.

Companies are realizing that introducing buzz words, toolkits and even change agents are not enough

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Mapping the Innovation Territory

Problem Framing Two clashing cultures

Research for research’s sake

Analysis Paralysis

Just Do It

Putting out fires

Perpetual Pilot

Problem Solving

Manifestations of these four pitfalls can be found in all sorts of organizations. Diagnosing the state of innovation in Fortune 500 companies reveals some of the challenges organizations face as they attempt to foster a new culture within the organization at large.

The case of a Fortune 500 industrial supply company INSITUM US was brought on to help a newly formed innovation team generate concrete metrics for a more informed understanding of their achievements, needs, and barriers since the team’s inception, and to provide the team with a working tool for benchmarking their progress and conveying their worth to the rest of the company. We started by conducting an “x-ray” of the team and key stakeholders using ethnographic interviews in order to diagnose the state of innovation in the company.

Mapping the Innovation Territory in an Industrial Supply Company The company’s values fell on the left side of the diagram while the innovation team’s values fell on the right, highlighting a clash of cultures within the organization.

Problem Framing

Analysis Paralysis

Perfectionism & Efficiency

Speed & Agility

Structure & Control

Creativity & Freedom

Expansion & Scale

Customer Intimacy

Stability & Fine-tunning

New Ideas

Hierarchy

Network, Collaboration & Collective Inteligence

Just Do It

Problem Solving

These findings helped us develop both “hard” and “soft” indicators within our metric so that it would resonate with the values of both the innovation team and the company at large. Examples of “hard” and “soft” indicators include the amount of money saved by deciding not to move forward with ideas early and the team’s ability to gain internal support through an employee coaching program. This was measured by employee sentiment of those who were coached in innovative practices and tasked with implementing these practices within their respective departments. In essence, our findings helped determine next steps for the team to continue their progress and make a more meaningful impact within the organization by bridging the culture gap. 4 | INSITUM | Innovation Through Research


The case of executive leadership We were contracted by a global furniture manufacturer to explore the needs, behaviors and motivations of executives in the US, Europe and the Middle East in their workspaces to inspire new environment designs. The research revealed two sets of values and beliefs that guide how leaders work, communicate and feel about their professional environments. Their behaviors are often aimed at complying with or transforming existing structures, systems and work practices.

Traditionalist

Change Agent

Believe in creating change through existing processes and structures to stay competitive; motivated by pragmatic change.

Believe in the need for new processes/structures and the need to demonstrate the value of these processes/structures to stay competitive and create change; motivated by breakthrough change.

Mapping the Innovation Territory of Different Types of Executives

Problem Framing

Analysis Paralysis

Just Do It

Traditionalist

Change Agent

Problem Solving

The traditionalist’s values can often push a culture towards ‘analysis paralysis’ while the change agent’s values can drive a culture more towards a ‘just do it’ mentality. Interestingly, this is exactly how the larger culture played out in the industrial supply company with those championing the core values tending towards issues of ‘research for research’s sake’ and ‘perpetual pilot,’ while the innovation team was struggling with issues of ‘two clashing cultures’ and ‘putting out fires.’

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Achieving Zen When an organization feels stuck it will often attempt to change its culture. This may mean shifting its culture entirely from one extreme to another or more commonly, bringing in an agent of change to promote practices that end up representing the opposite extreme, which then causes a culture clash. Ideally, organizations should focus on balancing existing structures, systems and practices with the new ones they choose to implement. Yet of course, this is easier said than done.

Balancing the Innovation Territory

Problem Framing

Explore

Do

Analysis Paralysis

Just Do It Learn

Scale

Problem Solving

We see three fundamental strategies for successfully integrating an innovation team’s practices into the foundation of organizational culture whether this team is centralized or decentralized:

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Align around a commonly understood objective and vision

How does a vision or strategy from the top get efficiently communicated and carried out once it is two to three levels removed from its original architects? Trying to put a plan into action that was not communicated by the plan’s designer can quickly become like a game of telephone where the vision becomes fragmented as it is interpreted by different department heads with distinct agendas. With the many buzz words floating around offices today that could have a myriad possible meanings, organizations should allocate more time towards alignment around a common vision, making sure everyone is on the same page.

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2

Understand and respect the benefits of each other’s values

There can be competition between those who value operational structure through hard data and monitoring and those who champion a culture of innovation and exploration, using practices that are often viewed as ‘chaotic’ and ‘unstructured.’ Yet, both of these mindsets are valid and both have their advantages and disadvantages. In order to work together to unlock the unique benefits of each set of cultural values, there must be mutual respect and an understanding of which mindset is better suited for a certain context or step in a larger vision and when they can be put to use synergistically.

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Re-orient the system to integrate practices from both sets of values

One of the biggest challenges innovation teams face is when it comes time to hand a project over to other teams within the organization. This is because the linkages between teams are often built with operational structure and processes in mind.While these types of linkages may work well between two teams of the same mindset, introducing an innovation change agent into the mix requires more flexible pathways that resonate with both sets of values.

What does this mean for you? Each organization is different so the tactics for achieving these strategies need to be tailored. Diagnosing the cultural status quo is a great starting point. This will inform the specific tactics such as alignment, visioning or framing workshops, team-building exercises, success metrics or coaching in user-centered design methods that will be most effective. IN

Ric Edinberg is the Director of INSITUM US office and a pragmatic dreamer who blends experiences in design planning and fine art to forge an approach to develop tools and systems that people can relate to and use, and that also add economic value to his clients. > ricedinberg@insitum.com Hannah Calderón a Project Lead at at INSITUM. Her knowledge of language and her background in discourse analysis give her the unique ability to develop insights about perceptions and expectations that are key in forging opportunities and business strategies for clients. > hannahcalderon@insitum.com Claudia Ruge is a UX Design Reseacher at United Airlines. She combines expertise in user research, usability, insight generation and design with business perspective to help United Airlines develop delightful digital experiences for their clients. > claudia.ruge@gmail.com

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“

Discovery consists of seeing what everybody has seen...

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...and thinking what nobody has thought. Albert Szent-Gyรถrgyi

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For over a decade, INSITUM has helped global organizations solve a wide range of business problems across different functional areas. 1500+ successful projects for different industries

Our innovation approach is centered on understanding and cocreating with the people who use, buy, distribute, sell, influence and/or interact with our clients’ products and services. Our process is not step-by-step, but dynamic, intended to approach different facets of a project simultaneously, reflecting how organizations and people think and work.

EFFORT

Our approach Ideate Envision Understand

Problem TIME

Our experience with this approach spans a wide range of industries and more than 1500 successful international, regional and local innovation projects regarding Strategic Research, Brand Development, Product Strategy, Digital Interaction, Service Design and Organizational Innovation. 10 | INSITUM | Innovation Through Research


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In our daily practice, we collaborate by integrating expertise in research, strategy and human-centered design, integrating ideas, theories, tools and methods from anthropology, sociology, cognitive psychology, economics, product and service design, architecture, marketing, and business strategy.

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Strategic Research Ethnography & Insights Strategic Segmentation Trends Forecasting Understanding your clients and trends that are affecting your business. INSITUM + WORLD COCOA FOUNDATION

Exploring successful farmers’ strategies Through their CocoaAction strategy, the World Cocoa Foundation (WCF) and its leading members in the global chocolate and cocoa industry are working to design a package of productivity and community development intervention programs that will reach 300,000 cocoa farmers in Ghana and Côte d’Ivoire by 2020. For this project, INSITUM helped WCF understand and document the characteristics and decision-making processes of successful farmers in Côte d’Ivoire. We then identified insights that will potentially inform future intervention programs for the general cocoa farming population.

Brand Development Brand Positioning Brand Architecture Brand Experience Design Developing the most relevant and differentiating brand strategy for your company. INSITUM + FARMACITY

Private label architecture INSITUM developed a new brand strategy that aligned with the business objectives of both company and consumers’ perceptions and expectations. Based on an ethnographic research approach, we crafted a new brand identity reflecting customer’s expectations, arranging the complete portfolio and creating a new set of sub brands for different targets. This led us to the final design of the entire Private Label Brand Architecture which was successfully implemented by Farmacity between 2013 and 2015, bringing growth revenue to the company.

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Product Strategy Concept Development Product Design Design Language Developing a more competitive product portfolio to your market. INSITUM + INTEL

Classmate PC INSITUM worked with Intel in several projects during three years with the objective of providing a constant flux of insights and ideas on technological products and services for the education market in Latin America. Since the beginning of this collaboration the Intel’s understanding of the educational market has increased substantially, and the Classmate PC was created within Intel Learning Series. As of 2011, 750,000 PCs were distributed, providing learning for all students and training for all teachers.

Digital Interaction Information Architecture User Experience Design (UX) Multi-Platform Usability Research Delivering the ideal digital experience for your customers. INSITUM + AMÉRICA MÓVIL

Claro Video America Movil asked INSITUM to design a Video on Demand service based on a deep understanding of behaviors and expectatios of potential users in Mexico, Colombia and Argentina. Drawing from qualitative research and co-creation sessions, we developed the information architecture, interaction design, user interface and implementation roadmap of the new service. With this new solution, in less that a year, América Móvil achieved second place in subscriptions among their competitors.

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Service Design Customer Experience Process Innovation Service Experience Diagnosis Designing the best customer experience to your clients at every service touchpoint. INSITUM + BANCO GALICIA

Galicia Move A major Argentinan bank asked INSITUM to design a new experience of banking service aimed at young people between 16 and 26 years, aligning the entire customer journey to their lifestyle, needs and aspirations. By identifying the key benefits that Millennials require for a bank product, we defined a new value proposition, designed guidelines and an implementation roadmap. The clear and visual deliverable of this project helped the client successfully launch a new user-centered product, that gave the bank 30.000 clients in the first 6 months and won them 2 innovation awards (Fast Company and CLAB).

Organizational Innovation Strategy & Pipeline Capabilities Process & Methodology Implementing and boosting an innovation culture within your company. INSITUM + MAPFRE

Ad-hoc innovation process and methodology MAPFRE called INSITUM to carry out an innovation diagnosis and implement an open innovation strategy that would allow detecting opportunities, capturing ideas and executing innovation projects focused on all aspects of the company. We detected low, medium and high priority innovation landscapes for the different operational areas, and designed innovation challenges based on which employees could develop desirable, viable and feasable solutions. The company had a 300% increase in the number of initiatives, and the new strategy was taken to the corporate level where it is currently being assessed for reproduction in several countries.

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